Plant Grower Zelenka Farms Files for Bankruptcy, Blaming Rain--Update
June 20 2016 - 7:10PM
Dow Jones News
By Katy Stech
Zelenka Farms, a plant grower for big-box retailers including
Lowe's Cos. (LOW), Kmart, Shopko and Home Depot Inc. (HD), has
filed for bankruptcy protection, blaming an unusually wet
spring.
Lawyers who put Zelenka Farms into chapter 11 protection on
Friday told a judge they are looking for buyers to take over the
Irving, Texas-based company's six farms, which employ 1,519 people
located in Tennessee, Oregon and other states.
With roughly 5,000 types of container-grown plants, Zelenka
Farms ranks as one of the nation's largest wholesale growers and
distributors of shrubs, trees, perennials, roses and other plants
within the country's $2.2 billion wholesale nursery products
industry. Zelenka Farms takes in roughly $130 million in annual
sales, including from its largest customer, Lowe's.
During a court hearing on Monday, Zelenka Farms bankruptcy
lawyer Holland O'Neil said the company's financial troubles began
in 2014 but worsened dramatically after an unexpectedly rainy April
and May, leaving it without enough money to pay down part of a loan
before a June 3 deadline.
"Those are the prime selling times for the company, and that
severely impacted the sales and revenue," Ms. O'Neil told U.S.
Bankruptcy Judge Harlin Hale.
Zelenka Farms and several affiliated companies face roughly
$187.7 million in debt, according to documents filed in U.S.
Bankruptcy Court in Dallas.
Zelenka Farms officials are negotiating with several potential
buyers who could purchase the company's operations by an Aug. 8
deadline, Ms. O'Neil said. In court papers, the company proposed to
hold a July 25 auction if several offers trickle in.
Judge Hale said Zelenka Farms officials could begin spending
part of a $35 million bankruptcy loan. Company officials have also
proposed to continue making payments to some vendors including
chemical suppliers, shipping firms and plant breeders who enable
Zelenka Farms to grow plants using their patented and trademarked
DNA.
Without the loan, Zelenka Farms and its affiliates "would not be
able to fund their operations, would run out of cash and would be
forced to shut down their operations," Chief Executive Eric W. Ek
said in court papers.
Founded in 1993 under the name Berry Family of Nurseries, the
company grows plants on a total of 3,577 acres of land on farms in
Oregon, Tennessee, Oklahoma, Michigan and North Carolina.
(END) Dow Jones Newswires
June 20, 2016 18:55 ET (22:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Home Depot (NYSE:HD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Home Depot (NYSE:HD)
Historical Stock Chart
From Apr 2023 to Apr 2024